Determine the payback period

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Question - You have been presented with the following data for Project A:

Year 0 Initial Cost $300,000

Year 1 Net cash flow after tax $40,000

Year 2 Net cash flow after tax $60,000

Year 3 Net cash flow after tax $80,000

Year 4 Net cash flow after tax $100,000

Year 5 Net cash flow after tax $120,000

Required - Determine the payback period?

a. 5 years

b. 4 years

c. 3 years 9 months

d. 4 years 2 months

Reference no: EM133029358

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